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5 February 2018updated 28 Jun 2021 4:40am

The internet created giants – but the healthiest ones don’t give anything away for free

Across the media the evidence is growing that the whole free model is under terrible, perhaps terminal, strain.

By Amol Rajan

Seven years ago, long before I had the privilege of being editor, I made and lost an internal argument at the Independent on the case for charging online. I wanted us to go radically upmarket and become what some had dreamed the paper would be for years, a kind of “white FT”.

My view was that quality costs; advertising income couldn’t be relied on forever; it was wrong to put our future in the hands of social media companies that could turn the taps off at any moment; a paywall would send a strong message about the integrity of the brand; the evidence suggested people were increasingly prepared to pay; asking readers to pay creates a direct, honest relationship with them; and being free can erode your editorial values by providing an incentive for salacious drivel.

There was nothing original about these arguments, all of them purloined from Rupert Murdoch. Now the raw commercial facts suggest that the decision to ignore my strategy was the right one: the Independent, very much free online, is worth tens of millions, if not more. Last summer it attracted a huge investment from a Saudi businessman.

And it has successfully surfed the wave of pro-Corbyn and pro-Sanders sentiment in America to make the most of the Brexit and Trump news dividend. Although, on social media at least, the content looks less and less like that of the old paper, the unarguable fact is that today it is a profitable business, whereas for most of its previous existence it wasn’t.

Yet I can’t help but wonder how long this will last. Across the media the evidence is growing that the whole free model is under terrible, perhaps terminal, strain. And in important ways it wasn’t really free in the first place.

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The idea that “if it’s free online, you are the product” was gaining currency long before John Lanchester riffed on the subject for the London Review of Books. In recent months, former tech executives have lined up to say that the companies they created are hacking our minds, storing dangerous quantities of data about us, and combating the very ideals they were founded to advance.

One, Chamath Palihapitiya, previously at Facebook, said that social media companies are destroying how society works. Facebook’s boast when you sign up that “it’s free and always will be” is starting to look like a sinister falsehood to those who argue that these platforms impose considerable costs – on our minds and our public life.

For the companies that rely on it, the decision in early January by Mark Zuckerberg to shift Facebook’s feed away from news and toward “meaningful interactions” – ie those from friends and family – could be fatal. In recent months, Mic, Mashable and BuzzFeed, three media brands driven by a free model based on prolific sharing, have announced layoffs or markedly lower valuations, citing in some cases the entertaining reason of a “pivot to video”.

The free model is also under strain in newspapers, which advertisers see as an ever less attractive venue for brands.

So much for the companies. As for the countries that rely on free social media platforms to distribute news and challenge either state monopolies in media, or just an absence of flourishing voices, the news is grim there, too. When Facebook announced last year that it would reduce the amount of news it distributed in six small markets – Sri Lanka, Slovakia, Bolivia, Cambodia, Guatemala and Serbia – news organisations saw their numbers of visitors drop by around half.

Amid the hype and hysteria of the early internet age, the idea that everything would – and should – be free has given way to brute realism. Certain rules of business are eternal, if mundane, such as: ask customers to pay – it’s the best guarantee of revenue.

I used to think the future of commerce was a BAT with FANGs. The BAT is China’s tech giants (Baidu, Alibaba, Tencent); the FANGs are their American rivals (Facebook, Apple, Netflix, Google). Now I realise this is too simple. The internet has created giants – monsters, you might say – but the ones with the healthiest prospects don’t give things away for free.

The same goes for hacks like me. Aside from a few incorrigible miscreants, most journalists do something valuable. Asking the public to pick up the tab for that value should be a source of pride, not guilt; and doing so makes it more likely they’ll be able to carry on. 

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This article appears in the 31 Jan 2018 issue of the New Statesman, The Great Migration